Informist, Wednesday, Nov. 13, 2024

By Priyasmita Dutta and Sagar Sen

NEW DELHI - The Indian government is hopeful of collecting another INR 250 billion to INR 300 billion from securities transaction tax in the remainder of 2024-25 (Apr-Mar), a senior finance ministry official said Wednesday. "Given the growth in investments and high equity trade volume, it is possible that the government can collect up to another INR 300 billion," the official told Informist on conditions of anonymity.

The government has almost met the Budget target for securities transaction tax collection during the full year. According to data released by the Central Board of Direct Taxes on Monday, the government had collected INR 360 billion as securities transaction tax as of Nov. 10, up 90% from a year ago. The Budget had projected securities transaction tax collection in FY25 at INR 370 billion.

The high collection is also owing to the change in securities and transaction tax in the Budget for FY25, announced after many retail participants burned their fingers in futures and options trade in equities.

The government has been keeping an eye on the speculative trade and increased the securities transaction tax rate on options to 0.1% of the option premium from 0.0625% and on futures to 0.02% of the price of futures from 0.0125%. The new rates have come into effect on Oct. 1.

In a post-Budget interview with Informist, Central Board of Direct Taxes Chairman Ravi Agrawal said that these changes in securities transaction tax should boost receipts by about INR 80 billion in FY25. End

Edited by Saji George Titus

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